Over and under valuation of stock will give a misleading picture about the working capital position and the overall financial position of the business. Methods of Stocktaking: Stocktaking refers to the physical verification of the items of inventory in order to ascertain the value for accounting purposes. Sale return still excluded in stock and purchase return included in stock. Non adjustment of goods received or sent on the sale or return basis. Stock is valued on the basis of physical verification at the end of the year and should reconcile with the book balance. There must be effective internal control system to control the stock in trade. (e) ensuring separate disclosure of the value of the various components of stock-in-trade in the balance sheet. 2. Where Stock Records are not Maintained: (a) Inquiring into the system of stock-taking and stock sheets, preparation by reference to counts, pricing, extensions and totals; AS-2 does not apply to WIP in construction contracts and related service contracts, WIP of service providers, shares and debentures held as stock in trade. It also does not apply to live stock, agricultural and forest products and mineral oils, ores and gases, if it is measured as Net Realisable Value. Auditing - Audit Verification. Advertisements. assets shown in Balance-sheet are properly valued accordance with the generally accepted conventions and accounting principles. Components of Valuation. Auditor should take the following important steps for the verification and valuation of Trade Creditors − How would you verify the following items, 1. Trade creditors 2. Loans 3. Debtors 4. Stock in trade VERIFICATION OF STOCK IN TRADE :- Explain the various provisions of law relating to What are the liabilities of the employer regarding Define these terms, 1. Minor, 2.
Cost of Investments When an investment is acquired, partly or fully, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued (determined as issue price by statutory authorities). The fair value may not necessarily be equal to the nominal or par value of the securities issued.
The verification of assets and liabilities involves the consideration of the following points: That each asset/liability is correctly stated in the balance sheet. That each asset/liability is correctly valued according to the generally accepted valuation principles. That the assets actually exist on the date of balance sheet, and are the property of the company. The audit procedures to be adopted for verification and valuation of various Trade Creditors Liabilities and Share Capital Liabilities are discussed below: Trade creditors Liabilities:These include suppliers of raw material and other requirements of a company: The auditor is expected to: Verify existence, obligati Verification and valuation of assets and liabilities 1. Topic: Verification and Valuation Of Assets & Liabilities Presentation By Syed Atta Hussain Shah (2K14-Com-26) and Sanjay Kumar (2K14-Com-93) Under the Supervision of Madam, Najia Shaikh 2. Accounting Valuation: The process of valuing a company's assets for financial-reporting purposes. Several accounting-valuation methods are used while preparing financial statements in order to Cost of Investments When an investment is acquired, partly or fully, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued (determined as issue price by statutory authorities). The fair value may not necessarily be equal to the nominal or par value of the securities issued.
(e) ensuring separate disclosure of the value of the various components of stock-in-trade in the balance sheet. 2. Where Stock Records are not Maintained: (a) Inquiring into the system of stock-taking and stock sheets, preparation by reference to counts, pricing, extensions and totals;
Auditing - Audit Verification. Advertisements. assets shown in Balance-sheet are properly valued accordance with the generally accepted conventions and accounting principles. Components of Valuation. Auditor should take the following important steps for the verification and valuation of Trade Creditors −
